Comparison Shopping “Get Ready to Take Charge of Your Finances”

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 What are your spending habits? Think about the last item you purchased –Did you look at the product carefully, or consider other options before purchasing it? –Did you buy the first thing you saw? Based on size? Based on color? Based on price? Compare products? Are you an impulse shopper or a comparison shopper?

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Shopping Habits Impulse Buying –Unplanned buying –Little consideration of the product or other options –“emotional buying” Comparison Shopping –Planned buying –Careful consideration of the product, features, price and quality –“rational buying”

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Comparison Shopping Benefits of comparison shopping –Buy the same product or service for less money –Buy more goods and services with the same amount of money –Buy a better quality product for the same amount of money

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Comparison Shopping Steps Step One – Decide exactly what is needed before shopping Step Two –What is the quality of the product I am using? Step Three –What is the total cost? Step Four –How will the product be used? Step Five –Consider the opportunity cost and make a decision

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 The Right Price Jose wants to buy a new bike helmet –3 choices Bell Trigger Giro Atmos Schwinn Intercept Which helmet should he choose? Follow the comparison shopping steps to make a wise decision

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Comparison Shopping – Step One Step One –Decide what is needed before shopping How will I use this product? How long does it need to last? What features do I really need? –Answering these questions will help a person make the best decision

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 The Right Price – Step One How will José use the helmet? –José will use the helmet when riding his bike to decrease the chance of injury How long should it last? –The helmet should be durable and last a few years What features does he need? –Strong chin strap and buckles –Proper ventilation –High impact absorption

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Comparison Shopping – Step Two Step Two –What is the quality of the products I am comparing? Depends on materials used, craftsmanship and durability –Look at the product and its packaging carefully –Ask others who own the same product –Refer to unbiased testing agencies for more information »Consumer Reports »Underwriter’s Laboratories »Better Business Bureau

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 The Right Price – Step Two Bell Trigger - $30 –Price is reasonable –Has all of the desired features Okay chin strap and buckle, okay ventilation, excellent impact absorption Giro Atmos - $190 –Price is too high –Has all of the desired features Excellent chin strap and buckle, excellent ventilation, excellent impact absorption –José does not race in professional races such as the Tour de France Schwinn Intercept - $17 –Price is reasonable –Has all of the desired features Excellent chin strap and buckle system, okay ventilation, excellent impact absorption

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Comparison Shopping – Step Three Step Three –What is the total cost? Need to consider additional costs other than what is shown on the price tag –Example: Clothing that needs to be dry cleaned will cost more over a lifetime than clothing that can be washed at home “Hidden costs” impact decisions and need to be considered carefully ItemPriceHidden CostFrequencyTotal cost after 6 months Wool jacket$50Dry cleaning $15 Every 3 months $80 Nylon jacket$60Wash at home $2 Every 3 months $66

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 The Right Price – Step Three José has no additional costs to consider

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Comparison Shopping – Step Four Step Four: –How will the product be used? Consider how the product will be used, how often it will be used and what price is appropriate for the use –Example: If a product is used once a year, spending more money for high quality and additional features may not be necessary –Example: If a product is used everyday, one may be willing to pay more for higher quality ItemPriceHow will it be used? FrequencyTotal cost per wear Custom made formal gown $120Lightly worn1 night - prom$120 In store formal dress $60Lightly worn3 times - prom, family wedding, formal dance $20

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 The Right Price – Step Four José will use the helmet everyday The helmet will receive moderate wear and tear, because José does not race or ride on very rough terrain

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Comparison Shopping – Step Five Step Five: –Consider the opportunity cost and make a decision Opportunity cost – something an individual gives up to receive another such as quality, price or features of a product –Example: If an individual wants an iPod that holds at least 500 songs, but it is too expensive, he may have to give up some memory to purchase an affordable iPod that holds fewer songs.

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 The Right Price – Step Five Opportunity costs –José may have to give up the excellent ratings on all Giro Atmos features to select a helmet he can afford. What is the best option for José? –Schwinn Intercept Provides José with all features he needs and is in his price range. The Giro Atmos is a great helmet, but too expensive. The Bell Trigger is a good helmet, but the chin strap and buckle system is not as good at the Schwinn Intercept

© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor – Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Making Good Choices Comparison shopping: –Helps individuals and families spend money wisely –Helps build a positive financial future –Can reduce costs without cutting back on necessary items –Allows people to save money while meeting needs